Premiere slumps on reports of loophole
News Corp. could avoid paying out minority shareholdersCOLOGNE, Germany -- Shares in German pay TV group Premiere continued their roller coaster ride Monday, plunging more than 12% at the start of trading amid reports that News Corp., Premiere's largest shareholder, could use a loophole in German law to avoid buying out minority investors.
There has long been speculation that News Corp. is interested in increasing its 25% stake in Premiere -- speculation that has encouraged minority investors to hold on to their stock. Normally under German law if a single shareholder acquires more than 30% of a listed company, they are required to make a buyout offer for the remaining shares.
But Germany's financial supervisory authority can grant an exception to the rule if the company successfully claims a buyout would be financial disastrous.
News Corp. is exploring just this possibility, according to German news reports. An article published Monday in newsweekly Der Spiegel claims Rupert Murdoch's company is willing to pump "several hundred million euros" into Premiere but wants to avoid the required buyout offer.
Premiere and News Corp. declined comment.
Premiere stock recovered some of its initial losses but was still down some 6.7% in late afternoon trading at 4.15 euros ($5.40).